Just 16% of BNPL users believe that it causes them to live beyond their means

Only 16 per cent of buy now pay later (BNPL) users believe that it causes them to live beyond their means, according to a study by Butter.

The study found that the majority of UK consumers would prefer to see BNPL options available when checking out online.

BNPL schemes allow customers to spread the cost of their purchases over a number of interest-free instalments.

Butter allows its users to spread the cost over 10 monthly instalments, however rivals including Klarna usually offer “pay in three” services.

Separate analysis from Butter has shown that BNPL payments account for 2.1 per cent of all ecommerce transactions.

The number has increased from 0.6 per cent since 2016.

The BNPL sector is strongest in Sweden, where industry giant Klarna operates, accounting for 23 per cent of all ecommerce purchases last year, up from 11 per cent in 2016.

The UK currently has the 10th biggest BNPL sector in the world, seeing an increase from one per cent in 2016 to five per cent last year.

A recent campaign by financial coaching app Claro claimed that BNPL models are promoting adults to live beyond their means.

READ MORE: “If you can’t buy it twice then you can’t afford it” – How BNPL schemes are ruining credit scores

However research by Butter contradicts the study from Claro, claiming that although 77 per cent of UK consumer opt to use BNPL schemes, only 16 per cent of adults believe that it causes them live beyond their means.

Butter found that of the 77 per cent of consumers who use BNPL schemes, 40 per cent use it sometimes, 23 per cent use it most of the time and 14 per cent all the time.

The vast majority of respondents stated that it allowed them to better manage their immediate finances.

“It’s disappointing to see some within the financial space choose to manifest their fears around the growth of the BNPL sector via a condescending smear campaign based on a pretty misleading piece of ‘research’,”  Butter chief executive Timothy Davis commented.

“To suggest the BNPL sector is the driving force behind an uplift in borrowing during one of the toughest financial periods of our lifetime is pretty shocking and it really demonstrates just how out of touch they are with the average UK consumer.”

“As with any sector, not all BNPL platforms are created equally and we do agree that there’s a very important differentiation to be made between some of the larger, less consumer-focussed players in the space.”

“For the rest of us, the BNPL offering is very much about improving the options open to the consumer. As the UK’s first FCA regulated BNPL provider, Butter has always pushed for a regulated, transparent space, utilising open banking and machine learning to ensure that lending is responsible and that customers are only able to borrow amounts based on what they can afford.

“By doing so through interest-free lending, we hope to drive an improvement across the board, giving traditional banks no other option but to sit up, listen and normalise an interest-free, instalment based offering for the consumer.”

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